Monthly Archives: September 2013

Holly

September 26, 2013

Hello everyone! This week’s issue of PlaneBusiness Banter is now posted! This week we get you updated on the latest in the American-US Airways anti-trust case with the DOJ, we take a look at how IATA sees airline profits shaping up worldwide for 2013, and we also talk a lot about a number of new airline commercials that have rolled out over the last week or so. United Airlines has a new brand campaign that just debuted, jetBlue has gone to the birds, and Southwest Airlines thinks you need to know about “doohickeys.”

What do our PBB subscribers think about all this? I summarize the feedback so far, as well as adding my own!

The IPO for Mexican airline Volaris rolled out last week. Shares went out at the bottom end of the range at $12/share. That’s okay. That still translated into $350 million to the airline.

Here is your test question for the week. Who is a major investor in Volaris?

Ding.

The correct answer is: Bill Franke’s Indigo Partners.

Here is your second test question for the week. Who is the presumed buyer of Frontier Airlines?

Ding.

The correct answer is: Bill Franke’s Indigo Partners.

You can put two and two together.

Airline stocks had another strong week last week, as analysts continue to issue bullish upgrades and estimate changes to 3Q13 numbers. It looks like the quarter will be a strong one.

However, as the IATA report this week suggests, North America is the exception worldwide. Earnings in the Asian-Pacific region have been especially hard hit this year.

Finally, we have been banned in Dallas. That’s right. I’ll tell you all about why I was scheduled to present at the Business Travel News 2014 Corporate Business Trends and Forecast conference in November — but I have now been disinvited. Why? Because a certain airline, a sponsor of the conference, apparently didn’t want me on the agenda.

What are they afraid of? Where has the LUV gone?

Very bad move from a management perspective. That kind of heavy-handed stuff has no place in today’s bag of enlightened and transparent management tools.

It’s a busy week!

PlaneBusiness Banter Now Posted!

We’re baaack! No more vacation for us.

This week’s issue of PlaneBusiness Banter is now posted.

This week we talk about a lot of stuff — including the fact that 3Q13 earnings are right around the corner. We are hearing very bullish comments from both analysts and airline folks about what we should see when the numbers roll out next month. Delta, in particular, looks like it is going to announce very strong 3Q13 earnings.

However, it looks like once again, United Airlines is going to lag its peers in terms of earnings and margin performance. We’ll have to wait to see.

This week we talk about whether or not the fact that United Airlines has a lack of dominance at its hubs (compared to Delta Air Lines for instance) is negatively affecting both revenues and costs. Hunter Keay, analyst with Wolfe Research, talked about this last week in a research note. We think he’s onto something.

In other news, U.S. Bankruptcy Judge Sean Lane approved AMR’s plan of reorganization last week, but the approval is contingent on the DOJ signing off on the deal. Judge Lane also refused to allow American Airlines‘ Chairman and CEO Tom Horton’s $20 million severance to be part of the reorganization plan. This means someone else is going to have to okay the payment.

Meanwhile hundreds of employees of both American and US Airways were in Washington today to lobby members of Congress on why the merger should be allowed to take place.

On the aircraft front, this week was simply stellar for those of us who like to watch brand new shiny airplanes take flight. We saw the maiden flights of both the Boeing 787-900 and the Bombardier C-Series 100 this week. If the Bombardier can come anywhere close to its projected fuel savings and engine performance (and we should start to get some real answers in about 6 weeks or so as flight testing continues) I think the company has developed a very viable player in the smaller jet segment.

But you know how it goes. Airlines are always reluctant to jump to a new player — especially when it is not part of a larger family of aircraft.

While we were on vacation, I am happy to report that energy prices more or less remained stable. Meanwhile, last week was a great week for airline stocks, as the inclusion of Delta Air Lines in the S&P 500 lifted the entire sector. Delta becomes the second airline in the index. Southwest Airlines is the second.

All of this, and much, much more, including a surprise departure announcement from a major airline CEO — in this week’s PlaneBusiness Banter.

September 11, 2001

As I always do each year, both here, and in PlaneBusiness Banter, I prefer to particularly remember those airline employees who lost their lives that day.

This year, because we took our vacation a week later than normal here at the PBB Worldwide Headquarters, we are not talking about the events of that day in PlaneBusiness Banter this year. Next week we return to work.

Yes, there were thousands of people who lost their lives that day. But for those of us who follow this industry, work in this industry, or simply continue to be fascinated by its endearing dysfunctionality, the loss of four airline crews that day hit us hard. And it still hurts.

This is our corner of the world. And as I see it, the courage and bravery of these crewmembers deserve our heartfelt acknowledgment. And remembrance.

American Airlines Flight 11, Boston to Los Angeles, crashed into the World Trade Center.

CREW: John Ogonowski, Dracut, Mass., Captain; Thomas McGuinness, Portsmouth, N.H., First Officer; Barbara Arestegui, flight attendant; Jeffrey Collman, flight attendant; Sara Low, flight attendant; Karen Martin, flight attendant; Kathleen Nicosia, flight attendant; Betty Ong, flight attendant; Jean Roger, flight attendant; Dianne Snyder, flight attendant; Madeline Sweeney, flight attendant.

United Airlines Flight 175, Boston to Los Angeles, crashed into the World Trade Center.

CREW: Victor J. Saracini, Lower Makefield Township, Pa., Captain; Michael Horrocks, First Officer; Amy Jarret, flight attendant; Al Marchand, flight attendant; Amy King, flight attendant; Kathryn Laborie, flight attendant; Michael Tarrou, flight attendant; Alicia Titus, flight attendant.

American Airlines Flight 77, Washington to Los Angeles, crashed into the Pentagon.

CREW: Charles Burlingame, Captain; David Charlebois, First Officer; Michele Heidenberger, flight attendant; Jennifer Lewis, flight attendant; Kenneth Lewis, flight attendant; and Renee May, flight attendant.

United Airlines Flight 93, Newark, N.J., to San Francisco, crashed in Shanksville, Pa.

CREW: Jason Dahl, Colorado, Captain; Leroy Homer, Marlton, N.J., First Officer; Sandy Bradshaw, flight attendant; CeeCee Lyles, flight attendant; Lorraine Bay, flight attendant; Wanda Green, flight attendant; Deborah Welsh, flight attendant.

May they all be at peace in a much better place